May 14, 2002
By Mike Krause
The proponents of a national ID card got a big boost in April when Congressmen James Moran (D-Va.) and Thomas Davis (R-Va.) introduced the Drivers License Modernization Act of 2002:
Among other things, this Act would federalize state drivers license issuance standards, link up even more government databases to the license, introduce the collection of bio-metric identifiers and open the door to yet more collecting of information on us by both government agencies and “authorized” private sector contractors.
In other words, it would change the lawful purpose of the card from licensing qualified drivers to justifying and tracking our existence. Yet another expansion of the surveillance state.
The underlying theory seems to be that if we are all placed under the same scrutiny and monitoring as a criminal suspect, the easier it will be to catch the terrorists among us.
But just how well does this theory mass surveillance of us all to catch a few work in practice?
Before he piloted a plane into the World Trade Center, known terrorist Mohammed Atta entered the U.S., opened an account in his own name at a Florida bank and received $100,000 from an Arab Emirate money changer.
This would seem exactly the scenario that the Bank Secrecy Act which requires financial institutions to file suspicious activity reports (SARs) on suspicious customers and transactions to the Financial Crime Enforcement Network (FinCEN) was created for. So what happened?
In 1999, a reported 116,884 SARs were filed on bank customers, up from about 80,000 two years earlier, and the number is growing (many for amounts less than $5,000) yet the number of federal money laundering convictions has risen only slightly since the practice started in 1996.
At a conference about illegal money laundering in February, Treasury officials told Insight Magazine (www.insightmag.com ) that there was a two-year backlog of SARs waiting to be entered into the system and several banking compliance officers admitted that they were unaware of any SARs being followed up by federal officials.
Moreover, officials from other federal agencies complained that it took weeks or even months to get copies of existing reports from FinCEN. According to a member of a multi-agency task force, “By the time we get the information, whoever is doing whatever has long gone and the trail is cold.”
In other words, what was enacted as a focused, crime-fighting tool has become a system of bureaucratic mass surveillance, to be perused and used at the leisure of government officials.
And its about to get worse. On April 24, provisions of the USA Patriot Act went into effect, bringing the mutual fund industry and credit card companies under new FinCEN reporting. If Mohamed Attas SAR is somewhere in a pile, its about to be buried under a new avalanche of paper.
But thats just the tip of the iceberg. In the Competitive Enterprise Institute book “The Future of Financial Privacy,” Lawrence Lindsey shows that between 1987 and 1995 the government collected 77 million currency transaction reports reports required by law for large cash transactions, usually over $10,000 and, out of those, 3,000 money laundering cases were prosecuted, with 580 guilty verdicts.
Thus, the surveillance state needed over 100,000 citizens to be reported as potential criminals to convict one real criminal. In this system, a day laborer buying a used car with a years worth of hard earned cash is as likely to be considered a criminal as is a drug dealer or terrorist.
According to Lindsey, in 1993 alone, of the 10 million or so currency transaction reports filed, some 63,000 were marked suspicious by the reporting institution, resulting in a 1% rate of criminal charges. Lindsey says the number of reports labeled suspicious has roughly doubled mostly because “banks are much more concerned about getting it wrong. If a financial institution does get it wrong, it is subject to penalties”.
This, too, is about to get worse as the USA Patriot Act seeks to bring even more types of businesses under the cash reporting system.
Folks, this is how the surveillance state works. It keeps valuable enforcement resources busy with mountains of data on everyone and away from the hard work required to target terrorists and criminals.
And the national ID plans that keep popping up would only serve to make things worse.
Former Virginia Gov. James Gilmore, now head of a congressionally appointed anti-terror commission, gets it: “We cannot let terrorists redefine our society for us.” Gilmore recently told an audience at Johns Hopkins University that Americans are needlessly being forced to believe they must give up their fundamental rights for the benefit of security. “I dont think we should teach Americans that they should get used to being watched, it runs against the American grain.”
Mr. Gilmore is right. We dont need no stinkin national ID card.
Copyright 2002, Independence Institute
INDEPENDENCE INSTITUTE is a non-profit, non-partisan Colorado think tank. It is governed by a statewide board of trustees and holds a 501(c)(3) tax exemption from the IRS. Its public policy research focuses on economic growth, education reform, local government effectiveness, and Constitutional rights.
JON CALDARA is President of the Institute.
MIKE KRAUSE is a Research Associate with the Independence Institute.
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